New Mini and Fiat 500 Go Head-to-Head

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Bloomberg News - March 24, 2013

BMW thought it had the niche tiny car segment all sewed up in the U.S., after 12 years of MINIs on the market, but along comes competition from Italy.

Meet the new MINI Paceman aimed at countering the threat.

A dozen years after inventing the nostalgia-hip segment of the car market, Bayerische Motoren Werke AG (BMW)’s MINI is finding itself increasingly squeezed by Fiat’s zippy little 500. Now, the Germans are pushing back with the Paceman, a two-door crossover coupe designed to keep the brand top of mind among young urban buyers.

Based on the Countryman, a four-door compact sport-utility vehicle, the Paceman was redesigned with a lower roofline and horizontal back lights to give it a broader and sportier look but retain the lines of an SUV. The car, available in Europe since March 16 and in the U.S. soon, starts at $23,900 in the American market — MINI’s most expensive offering.

The Paceman, IHS predicts, will sell 20,000 — not huge, but enough to keep the overall brand from shrinking as customers await the new generation. With the new models coming on line, IHS expects MINI sales to top 400,000 in 2017.

The Paceman is arriving as sales of Fiat’s 500 have picked up. The squat compact, based on the 1960s classic featured in movies such as La Dolce Vita and Roman Holiday, sold 237,000 last year as U.S. deliveries more than doubled.

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